Federal Register / Vol. 88, No. 243 / Wednesday, December 20, 2023 / Notices 88205 

1See Private Fund Advisers; Documentation of 

Registered Investment Adviser Compliance 

Reviews, Investment Advisers Act Release No. IA– 

6383 (August 23, 2023) [88 FR 63206 (September 

14, 2023)] (‘‘Adopting Release’’); the Adopting 

Release solicited comment on the ‘‘collection of 

information’’ requirements and associated burdens. 

The Commission received no comments in response 

to this request in the Adopting Release; however, 

we have adjusted certain of the estimates upwards 

to reflect updated data/figures for certain estimates. 

2Private Fund Advisers; Documentation of 

Registered Investment Adviser Compliance 

Reviews, Investment Advisers Act Release No. 5955 

(Feb. 9, 2022) [87 FR 16886 (Mar. 24, 2022)] 

(‘‘Proposing Release’’). 

3The following types of private fund advisers 

(excluding advisers managing solely SAFs), among 

others, will be subject to the rule: unregistered 

advisers (i.e., advisers that may be prohibited from 

registering with us), foreign private advisers, and 

advisers that rely on the intrastate exemption from 

SEC registration and/or the de minimis exemption 

from SEC registration; However, we are unable to 

estimate the number of advisers in certain of these 

categories because these advisers do not file reports 

or other information with the SEC and we are 

unable to find reliable, public information; as a 

result, the above estimate is based on information 

from SEC-registered advisers to private funds, 

exempt reporting advisers (at the State and Federal 

levels), and State-registered advisers to private 

funds, in each instance excluding advisers that 

manage solely SAFs; these figures are approximate, 

exclude in each instance advisers that manage 

solely SAFs, and assume that all exempt reporting 

advisers are advisers to private funds; the 

breakdown is as follows: 5,248 SEC-registered 

advisers to private funds; 5,234 exempt reporting 

advisers (at the Federal level); 562 State-registered 

advisers to private funds; and 1,922 State exempt 

reporting advisers. 

SECURITIES AND EXCHANGE 

COMMISSION 

[SEC File No. 270–XXX, OMB Control No. 

3235–XXXX] 

Submission for OMB Review; 

Comment Request; Rule 211(h)(2)–1 

Upon Written Request, Copies Available 

From: Securities and Exchange 

Commission, Office of FOIA Services, 

100 F Street NE, Washington, DC 

20549–2736 

Notice is hereby given that, pursuant 

to the Paperwork Reduction Act of 1995 

(44 U.S.C. 3501 et seq.) (‘‘PRA’’), the 

Securities and Exchange Commission 

(‘‘Commission’’) submitted an 

information collection request to the 

Office of Management and Budget 

(‘‘OMB’’) for review and clearance for 

the collection of information associated 

with the new Rule 211(h)(2)–1 17 CFR 

275.211(h)(2)–1) under the Investment 

Advisers Act of 1940 that was adopted 

by the Commission on August 23, 

2023.1 The title for this collection of 

information is: ‘‘Rule 211(h)(2)–1 under 

the Investment Advisers Act of 1940.’’ 

Final rule 211(h)(2)–1 prohibits all 

private fund advisers from, directly or 

indirectly, engaging in the following 

activities, unless they provide written 

disclosure to investors and, in some 

cases, obtain investor consent regarding 

such activities: charging the private 

fund for fees or expenses associated 

with an investigation of the adviser or 

its related persons by any governmental 

or regulatory authority (other than fees 

and expenses related to an investigation 

that results or has resulted in a court or 

governmental authority imposing a 

sanction for a violation of the 

Investment Advisers Act of 1940 or the 

rules promulgated thereunder); charging 

the private fund for any regulatory or 

compliance fees or expenses, or fees or 

expenses associated with an 

examination, of the adviser or its related 

persons; reducing the amount of any 

adviser clawback by actual, potential, or 

hypothetical taxes applicable to the 

adviser, its related persons, or their 

respective owners or interest holders; 

charging or allocating fees and expenses 

related to a portfolio investment on a 

non-pro rata basis when more than one 

private fund or other client advised by 

the adviser or its related persons have 

invested in the same portfolio company; 

and borrowing money, securities, or 

other private fund assets, or receiving a 

loan or extension of credit, from a 

private fund client. 

In the Proposing Release, we solicited 

comment on whether rule 211(h)(2)–1 

should include disclosure and/or 

consent requirements.2 In response to 

comments received, we have decided to 

adopt such a requirement. Accordingly, 

the final rule generally will provide 

either a disclosure-based exception or a 

disclosure- and consent-based exception 

for each restricted activity. We believe 

that investors will be better informed 

and receive enhanced protection as a 

result, while still potentially benefiting 

from these activities when they are 

carried out in the interests of the fund, 

if investors are provided with 

disclosures and, in some cases, consent 

rights regarding these activities. The 

collection of information is necessary to 

provide private fund investors with 

information about their private fund 

investments. We believe that many 

advisers fail to provide disclosure of the 

activities covered by the restrictions or, 

when disclosure is provided, it is often 

insufficient. 

Each requirement to disclose 

information, offer to provide 

information, or adopt policies and 

procedures constitutes a ‘‘collection of 

information’’ requirement under the 

PRA. This collection of information is 

found at 17 CFR 275.211(h)(2)–1 and is 

mandatory if the adviser engages in the 

restricted activity. The respondents to 

these collections of information 

requirements will be all investment 

advisers that advise one or more private 

funds. Based on IARD data, as of 

December 31, 2022, there were 12,234 

investment advisers (including both 

registered and unregistered advisers but 

excluding advisers managing solely 

securitized asset funds (‘‘SAFs’’)) that 

provide advice to private funds.3 We 

estimate that these advisers, on average, 

each provide advice to 8 private funds 

(excluding SAFs). We further estimate 

that these private funds will, on average, 

each have a total of 63 investors. As a 

result, an average private fund adviser 

will have a total of 504 investors across 

all private funds it advises. Because the 

information collected pursuant to final 

rule 211(h)(2)–1 requires disclosures to 

private fund investors, these disclosures 

will not be kept confidential. An agency 

may not conduct or sponsor, and a 

person is not required to respond to, a 

collection of information unless it 

displays a currently valid OMB control 

number. 

We have made certain estimates of 

this data solely for this PRA analysis. 

The table below summarizes the initial 

and ongoing annual burden estimates 

associated with the rule. 

TABLE 3—RULE 211(h)(2)–1 PRA ESTIMATES

Internal initial 

burden hours 

Internal annual 

burden hours Wage rate 1 Internal time cost Annual external cost burden 

Proposed Estimates 

Preparation of written notices ........ 15 10 hours 2 ................... $422 (blended rate for compliance 

attorney ($425), accounting 

manager ($337), senior portfolio 

manager ($383) and assistant 

general counsel ($543)).

$4,220 ......................... $3,178.3


ddrumheller on DSK120RN23PROD with NOTICES1
88206 Federal Register / Vol. 88, No. 243 / Wednesday, December 20, 2023 / Notices 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3For purposes of the Pricing Schedule, ‘‘NDX’’ 

means A.M. or P.M. settled options on the full value 

of the Nasdaq 100® Index. See Options 7, Section 

1(c). 

TABLE 3—RULE 211(h)(2)–1 PRA ESTIMATES—Continued 

Internal initial 

burden hours 

Internal annual 

burden hours Wage rate 1 Internal time cost Annual external 

cost burden 

Provision, distribution, collection, 

and tracking of written notices 

and consents.

9 6 hours 4 ..................... $73 (rate for general clerk) ........... $438.

Total new annual burden per 

private fund.

16 hours ..................... $4,658 ......................... $3,178. 

Avg. number of private funds per 

adviser.

8 private funds ............ 8 private funds ............ 8 private funds. 

Number of advisers ........................ 12,234 advisers .......... 12,234 advisers .......... 9,176 advisers.5

Total new annual burden ........ 1,565,952 hours ......... $455,887,776 .............. $233,290,624. 

Notes: 

1The hourly wage rates in these estimates are based on (1) SIFMA’s Management & Professional Earnings in the Securities Industry 2013, modified by SEC staff 

to account for an 1,800-hour work-year and inflation, and multiplied by 5.35 to account for bonuses, firm size, employee benefits and overhead; and (2) SIFMA’s Office Salaries in the Securities Industry 2013, modified by SEC staff to account for an 1,800-hour work-year and inflation, and multiplied by 2.93 to account for bonuses, firm size, employee benefits and overhead. 2This includes the internal initial burden estimate annualized over a three-year period, plus 5 hours of ongoing annual burden hours and assumes notices and consent forms will be issued once a quarter to investors; the estimates assume that most private fund advisers will rely on the disclosure-based or investor consent exceptions to the rules and thus distribute written notices and consent forms to investors (and collect, retain, and track consent forms); however, the estimates also take 

into account that certain fund agreements may not permit or otherwise contemplate the activity restricted by the rule (e.g., liquid funds may not contemplate an adviser clawback of performance compensation) and, accordingly, the estimates take into account that advisers to those funds will not prepare written notices (or, if applicable, prepare, collect, retain, and track consent forms) as contemplated by the rule. The estimate of 10 hours is based on the following calculation: ((15 initial 

hours/3 years) + 5 hours of additional ongoing burden hours) = 10 hours. 3This estimated burden is based on the estimated wage rate of $565/hour, for 5 hours, for outside legal services and $353/hour, for one hour, for outside accounting services, at the same frequency as the internal burden hours estimate; the Commission’s estimates of the relevant wage rates for external time costs, such as 

outside legal services, take into account staff experience, a variety of sources including general information websites, and adjustments for inflation. 4This includes the internal initial burden estimate annualized over a three-year period, plus 3 hours of ongoing annual burden hours; the estimate of 6 hours is 

based on the following calculation: ((9 initial hours/3 years) + 3 hours of additional ongoing burden hours) = 6 hours. 5We estimate that 75% of advisers will use outside legal services for these collections of information; this estimate takes into account that advisers may elect to 

use outside legal services (along with in-house counsel), based on factors such as adviser budget and the adviser’s standard practices for using outside legal services, as well as personnel availability and expertise. 

The public may view background 

documentation for this information 

collection at the following website: 

www.reginfo.gov. Find this particular 

information collection by selecting 

‘‘Currently under 30-day Review—Open 

for Public Comments’’ or by using the 

search function. Written comments and 

recommendations for the proposed 

information collection should be sent 

within 30 days of publication of this 

notice by January 19, 2024 to (i) 

MBX.OMB.OIRA.SEC_desk_officer@

omb.eop.gov and (ii) David Bottom, 

Director/Chief Information Officer, 

Securities and Exchange Commission, 

c/o John Pezzullo, 100 F Street NE, 

Washington, DC 20549, or by sending an 

email to: PRA_Mailbox@sec.gov. 

Dated: December 14, 2023. 

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–27887 Filed 12–19–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–99171; File No. SR–ISE– 

2023–36] 

Self-Regulatory Organizations; Nasdaq 

ISE, LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend the Fees for 

Options on the Nasdaq 100 Index in 

the Exchange’s Pricing Schedule at 

Options 7 

December 14, 2023. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on December 

8, 2023, Nasdaq ISE, LLC (‘‘ISE’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission (‘‘SEC’’ or 

‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the Exchange. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend the 

fees for Nasdaq 100 Index options in the 

Exchange’s Pricing Schedule at Options 

7, Section 5A. While these amendments 

are effective upon filing, the Exchange 

has designated the proposed 

amendments to be operative on 

December 1, 2023. 

The text of the proposed rule change 

is available on the Exchange’s website at 

https://listingcenter.nasdaq.com/ 

rulebook/ise/rules, at the principal 

office of the Exchange, and at the 

Commission’s Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

forth in sections A, B, and C below, of 

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The purpose of the proposed rule 

change is to amend the fees for NDX 3


ddrumheller on DSK120RN23PROD with NOTICES1